Bed Bath & Beyond stock ended another 10% down: find out why
Shares of Bed Bath & Beyond Inc (NASDAQ: BBBY) ended another 10% down on Thursday after the beleaguered retailer announced plans of a reverse stock split.
Shareholders are yet to approve the reverse stock split
The chain of retail stores wants its shareholders to vote in favour of the reverse stock split at the meeting on May 9th.
Bed Bath & Beyond aims at significantly lowering the total number of its outstanding shares with the reverse stock split that will enable it to execute on the recently announced plans of raising up to $300 million in new equity. The filing reads:
The Company may be unable to avoid bankruptcy if this Proposal fails to obtain shareholder approval. We need to raise capital to have necessary cash resources to fund operations and service obligations under our Credit Agreement.
Bed Bath & Beyond stock has traded under $1.0 in recent weeks.
Bed Bath & Beyond Inc recently secured a lifeline
Bed Bath & Beyond is yet to reveal at what ratio it intends to reverse split the stock but the board is considering between 1-for-10 and 1-for-20, that much is known. The filing adds:
We believe that an increased share price would enable us to attract additional institutional investors and investment funds who may not consider purchasing our common stock due to our low trading price.
Earlier this week, the retailer said Hilco Global has given it a $120 million lifeline that it intends to use to fill up its shelves again in an effort to improve sales.
Wall Street currently has a consensus “sell” rating on Bed Bath & Beyond stock.
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